Electric Power of Serbia asks for permission to increase price of electricity

"Electric Power Company of Serbia" (EPS) has submitted the request for increase in price of electricity to the Agency for Energy, and that proposal may be forwarded to the Government as soon as tomorrow (March 26, 2009). As "Blic" finds out, the price of electricity should be increased by about 8%.

People in the Agency for Energy told "Blic" that they had received the request for increase in price of electricity from EPS, and that they had approved and forwarded it to the Government. Although the people from the Agency were unable to specify the amount of increase, "Blic" found out that the new electricity bills would be about 8% larger than before. It is interesting that EPS asked for a price increase of about 20%, but the Agency did not approve of that.

However, the increase by 8% is not small, and it could raise inflation by 0.5%.

Goran Nikolić, economic analyst from the Chamber of Commerce of Serbia, says that the price increase will have both direct and indirect consequences.

- If the price of electricity was increased by 8%, the retail prices would grow by 0.5%, while indirect effect would be somewhat smaller. Also, it should be said that electricity bills represent 5% of all production costs, so that the prices of all goods and services that have electricity as input would be increased – Nikolić explains.

The price of electricity in our country was last time increased on August 1st, 2008, by 8.4%, so that 1 kWh now costs about 4.5 RSD.